What is SDLT?

Stamp Duty Land Tax (SDLT) is usually paid when property or land is purchased or transferred in the UK. The amount that is paid for the property will establish how much, if any SDLT is to be paid. The value however, can vary depending on whether the property is residential, freehold, leasehold. Some other factors may also be taken into consideration when determining the SDLT. Generally SDLT is charged as a percentage of the purchase price when the property or land is purchased or transferred, which higher percentage SDLT rates being charged to transactions of higher value. There are some properties which may either be exempt from SDLT or the amount of SDLT payable may be reduced.

SDLT is charged based upon the value of the property or land’s ‘chargeable consideration’. The property or land’s chargeable consideration includes the economic value of what was given in exchange for property, such as the transfer of an existing mortgage, payment of money, provision of services as well as the payment of money.

Usually it is simple to calculate the SDLT on the purchase of a residential property as the chargeable consideration will be the property’s purchase price minus the value of any extras within the property which would not be classed as fixtures and fittings .i.e. furniture. It is then possible to apply the purchase price established to the correct SDLT threshold and rate. Unfortunately, calculating the SDLT on other transactions can be more complicated as the chargeable consideration can vary depending property factors such as whether it is freehold or leasehold and therefore it is important that the SDLT is worked out correctly.

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